>> it is really just beginning. recovery is beginning because the core of the systems are repaired. seen business is really starting to invest.

ea ds cuts jobs from its base units. >> we are talking out -- technology all day. caroline hyde wins us from the conference in paris. nokia maybe close to deal with tax authority. we have that story from hong kong. hour, we'reer an covering -- covering travel. >> us to you about the big

interviews we have coming up on bloomberg. from aris.joined she runs an online beauty supplier. peter long talks was next hour after we get earnings from that business. >> later from the web, paypal president david marcus joins us. that will be at 7:30 a.m. london time. later on bloomberg television, we will be joined by heston blumenthal. >> they were talking about the effectiveness of forward guidance. we have more on what he has been saying. >> he has been. good morning to you both. the issues that he faces with the bank of england very similar

to what the u.s. faces. one is the recovery taking hold? two, when is it time to withdraw stimulus. >> historic relationships for monetary policy -- the relationship between monetary policy and a person is purchasing -- purchasing manager would suggest that rates would have increased already. would have been what we had tried it to guard against which would have been a premature withdrawal of monetary stimulus. >> a premature withdrawal of stimulus. when you think about it, that is what forward guidances for. it is to communicate that is not going to happen. the word for almost every goingl banker -- when you to take away the punch bowl a little bit too early? on the other side, if you keep you keep it-- if

there too long, there are risks on the other side. >> on the housing market, questions are being asked about how effective the bank of england can be. without using the classic tools of monetary policy. as it was a rather festive speech, because he talked about the ghost of christmas past. --'re looking at some index should we be worried and what does it mean? take a listen to this. is awarenk of england of the risk of extended monetary stimulus. it can act in a timely fashion to mitigate them. the bank demonstrated this flexibility recently with a package of measures targeted at the housing market. >> he is talking about ending funding for lending the mortgage market. is worries for mark carney not just a housing market in

isolation. it is that the housing market goes on a tear and a bubble is created in their eyes, the risks to the economy is you have to raise rates prematurely to stave off the bubble. once i was really interested in about thed to say housing market. if you look at the mortgage market now compared to where was in 2007, he said it is rocksolid now. it does not strike you who is overly concerned about -- quite easy towas call anything rocksolid in comparison to the mortgage market read 2008. he thought not lending standards which have greatly improved. >> he has some great stats. 60% of mortgages you put less than 10% down. now, 85% of mortgages yet but more than that down. >> not many can afford the 10% deposit even now. plans to cut almost

10,000 jobs of from its defense and space unit. we are joined from berlin. the origins of reviews -- this restructure must lie within the failed merger with bea systems -- ba systems. >> that is a drop from defense spending from cash-strapped governments. proposed a merger would be 80 systems, he was trying to balance out the civil -- is this of airbus -- civil business of airbus so we would represent around 50% of revenues each. that was blocked. they decided to focus the business on airbus. as for the space business and defense business, a one to increase the profitability and increase margins there. thatis happening is

defense and space are going to be merged. it doesn't mean they're going to do -- give up on defense altogether. they're going to focus on breaking into export markets rather than relying on the european market. to increase profitability and efficiency so they can get in the markets. nuts and bolts mean we will have especially 6000 jobs will be going over the next three years. most of them will be voluntary so they should get union back deck -- union backing. they will be in the u.k., germany, and france. there are 71% this year. -- david tweed. >> the world has seen vast achievements in technology that affect all of our lives. this conference is focused on the decade ahead.

>> just think about the changes that we have seen in the last decade alone since the first conference in 2003. in 2003, itunes had just lost -- launched. at the time you could get your hands about 200,000 songs. $.99 per song. fast forward by 10 years and it is not 200,000 songs, it is 26 million. they're selling about 26 million ipods per year. -- and thes competition is right. you have spotify, pandora. apple is not alone. there are bigger changes. think about camera phones. back in 2003, they had just caught on. they were causing a stir. they were being bandied changing

rooms and companies worried about espionage. taking a picture with your phone has become so popular that we now have the word self the in the oxford dictionary. megapixel nokia phones. you can video should them as well. investment changes have been choose that huge. -investment changes have been huge. big changes in investment, big changes in scope. >> camera phones, for better and for worse. is looking more competitive than it did in 2003? >> certainly looking more competitive. money is chasing these investments. think about the twitter ipo we sought the stock soar 70% on the first day. with any companies and investors getting competitive, countries as well. a lot of limelight is being

clinched a hold of by the likes of london, berlin. talks of new technology hubs. paris has gone a bit by the wayside. quick to rollbeen up the red carpet for the investors and startups. they are trying to grab back the initiative. if a poor reputation. they have high-end changing tax laws, difficult labor laws across the board, and they for bid dailymotion to be bought out by yahoo!. too many startups go to london. it is easier. they are trying to change that around. yet more plenty -- money pumped in. the government is putting its money where its mouth is. million euros are going into this. i will be talking about this with our guests.

i will be talking to someone with birch box. i will be saying what she thinks the sentiment is like here. after you. -- back to you. >> speaking of tech companies, nokia is said to be nearing a deal with india tax authority. it is ready to pay off to microsoft. we have the details from hong kong. >> a very good morning to you. we are watching what is happening from the delhi high court. they are ready to rule on its key assets today. the company is close to settling a tax dispute in india which should help complete a deal with microsoft. the finnish company is said to be willing to pay half $1 billion to unfreeze assets. why were they frozen to begin with? on and taxes were going

the country froze its assets in september. nokia has agreed to sell its mobile business unit to microsoft. it is keen on getting it settled quickly. nokiae-mail statement, said they are committed to getting their assets unfrozen and called on the india tax help conclude the issue. budge, andes not this is a worst-case scenario, you can see nokia looking for a new buyer. >> it is been a busy few days. we have just had industrial production numbers. >> this is what i will tell you. we have had a solid week of eagle momentum until now is what analysts are telling me. we have a disappointment in form momenta.s

factory production rising 10% a year ago, and analysts are telling me that just a couple minutes ago that export growth according to the industrial survey is actually inflated and it reinforces their view that double-digit export growth in september is likely disguised as trade flows. take that as you will. >> at 10:00 this morning, we will get earnings from qe travel. >> a very good day to you. we are going to get the numbers. we have had a number of conversations with peter long and we will again today. this time he is doing his conversation live from the google headquarters. could there be something in the presence at google headquarters in terms of how we are going to interact with qe travel? we know technology is the forefront. 341 million pounds in terms of

net income. get ready for a little bit of a boost to the dividend. you'll have that conversation with peter long himself live after he is done the initial sweep of numbers. >> coming up, investing in the new year. what challenges are ahead for the investment community? our next guest says the big scene for next year is open with normalization. the show, croatia cashes in on game of thrones. fans flock to the medieval part of the country that served as a hit backdrop. ♪

>> time for day -- for today's company news. ofco has acquired a stake --. lazada sells consumer goods. nokia said to be nearing a deal with india tax authorities. they are said to be willing to pay 300 million euros if they're willing to shift to microsoft.

formula one teams will start to byrate under -- control 2015. the new rules will be approved by the end of june next year. low -- welcome "countdown." >> i feel pretty comfortable about the long-term outlook. the longer-term outlook is going to turn on these bigger questions, the business investment, what happens to productivity, what happens to be so-called supply-side of the economy. >> you can test that interview later today when "charlie rose" airs on bloomberg television.

let's welcome the chief executive at hermes fund. >> how will investors cope with normalization? >> with difficulty. it is not clear that normalization will happen quickly. >> what governor carney is saying is that this applies to the fed as well. what -- interest rates will be lower than normal for longer than normal. their afraid to do it now because the recovery is not solid in their view. it is this question of how will that --s cope knowing will have to go up. that is normalization. we can't tell because essentially the best head in the bank says that we have judged that the economy is not recovered sufficiently yet. of the 300a founder

club which likes to think about some of the systemic issues and big questions about fund management. as you look to 2014, which is the biggest issue for you? obviously, we each top for ourselves. one of the things that has been discussed as members is the issue for forward guidance. there are some members who question why the bank of england and why the fed and indeed, whether the market seem to want us to have such clear, forward guidance to work out what is going to happen next. being told byy on the central monetary authorities is counter productive. >> interesting that you make that point. we hear calls for more transparency, more communication from central bank. i'm sure someone has done studies on the amount of transparency, the amount of new releases from central banks and the number has called for more.

>> it is linked and the more they give markets, the more people want more information. as i said, some of my colleagues in the 300 think it is blurring the lines from an investment sign, which should try to guess what the banks are going to do or make a reasonable assumption and the dependence on information. the other thing which, going back to the themes, we have had a very strong markets and equities that is almost caught unawares investors in the markets. the united states. this is then stronger than anticipated recovery in the united states. it looks that -- it looks like a stronger than expected recovery in the united kingdom. and the whole issue of the housing market, again, governor carney in the u.k. says that he is looking at choosing other tools besides monetary policy. is saying weitself

are going to enter another bull market by 2025 and it will go up and up and up. it feels as if it is the beginning of a double there. >> we will hear more of your thoughts and a second. -- in a second. ♪ >> welcome back to "countdown."

would you rather we hadn't have had forward guidance? >> we look back to the fulcrum days when he gave no guidance. the guidance that we have from the bank of england when seven percent being the trigger, and it is actually just the trigger for us to consider action, not do action. that is saying that at some stage, we will judge unemployed layer and then for us to raise interest rates. i am not sure why it was mentioned. wife's you are -- >> you are very critical of the way risk is assessed. how should we address it in the modern age? >> i think there are two things that get confused. areld volatilities markets volatile -- risky long-term risk and loss. we tend to forget about that. we're so assessed with volatility and we are says with short-term changes.

this ties into long-term investments. you forget that in the long- term, volatility eases up. my favorite one is if you invest in the s&p index and in hedge funds at the beginning of 07, and january 07, by then, you would have made more money than in the s&p. in between, you lost a lot more money. the point i'm trying to make is that volatility -- volatility can smooth out. it does seem to open the markets are going up, but when it goes down it disappears and you have the correlation. it is logical and the reason it coming in general, diversification is -- does not work when there is a crisis. the reason is we are all educated in the same kind of background and same sort of thing of economics. we all get our news from bloomberg. seriously. we are all watching the same markets and of course we are going to arrive at the same conclusion.

>> thank you very much for joining us. >> coming up, a surprise in the mail. join the 400,000 people that are doing that. ♪ >> these are the bloomberg top

headlines. europe is on the deal -- break about banking union. that is something that germany had previously rejected. eu leaders have agreed to make the thanks failure bill for next priority for next week's summit. a landmark step in a five-year effort to rein in the wall street. they have decided to curb some types of trading. five agencies are set to sign off on the trading band. it is being contested by wall street banks including jp morgan

and goldman sachs for more than three years. protesters in ukraine held out for a 20th day in kiev. tensions rose after police confronted protesters demand in the ousting of president viktor yanukovych. hello, welcome to "countdown." i am mark arden -- mark barton. >> i am an edwards. nnai am an edwards -- a edwards. >> if you look at that mortgage market today, it is rocksolid. back in 2007, 2008, at that point 60% of the mortgages, you

put less than 10% down on a house. now 85% of mortgages are the other way around. yet the but a lot more down on houses. the standards have improved dramatically. markets is a housing that is still relatively firmly valued. that is put it that way. not just in london, more broadly around the country. relative to incomes and relative to historic levels. it is starting to pick up again. within the context of households that pay down about 30 percentage points of debt relative to their income relative of the last five years. they have more debt relative than their income than american households per you look at that and say, ok. there is some welcome recovery in the u.k. housing market but let's be prudent. let's act early. let's make sure to act in a constructive way. take someved into

steps in a constructive way. >> describe your approach -- we are open for business. >> that is a different issue, charlie. mortgaget open to the business. >> you contest that today when "charlie rose" airs on over television at the times on your screen. >> president obama and oprah winfrey are just some of the heads of state and dignitaries due to visit the memorial service of nelson mandela today. many are comparing it to the funeral of jfk back in the early 60's. >> this is one of the biggest gatherings of world leaders. we have not seen something like --s sincerely 1960s something like this since the

early 1960s. royalty from around the world, and about 75 people. what is fascinating is the true message of reconciliation that he always talked about. people that will be talking will be president barack obama, and cuban president ronald castro, and the rainy president roos on -- hassan rouhani will be present. hopefully this will be a time where people can reconcile. >> as is often the case, it is the absentees that are just as notable. >> we fax it got most of the countries that have been represented across the world. syria is not going to be attending. we know that some countries have not even come out with any kind of show of gratitude or grievance at all.

this is going to be interesting to see how it plays out in the rest of the day. what is fascinating is that cleat -- queen elizabeth will not be attending but prince charles will be attending, but not today's memorial. he will attend the actual funeral on sunday. >> the memorial today will be four hours long tackle president obama will be speaking. >> four hours long. annie lennox will be attending and singing. mandela was a big fan of the spice girls. they have had encounters in the past. is it not for mandela. this is really symbolic because it is going to be in the soccer stadium. this is where his last public appearance was. he lost his granddaughter just before the soccer world cup. he did have a very short appearance in the closing ceremony in 2000 and. 2010. this is a massive security issue for the country.

11,000 troops would be deployed around the city. we think that is the overall figure but it seems that the defense minister says it is going to hire security companies to deploy. south africa is known for very high crime. to comingmes together, south africans always put differences aside and they show unity. during the world cup we sought, and we're seeing it again. >> the body lies in state from tomorrow? >> for three days. all south africans will be able to walk past the body. everyone will be able to pay their respect in the next three days in pretoria. funeral, about 9000 meter have been credited to cover this event. was if it -- interesting is that the south african government had asked a lot of the people, this

is the memorial service as opposed to the funeral. they are trying to keep that is -- as private as they can. ♪ >> welcome back to "countdown."

>> 6:40 in london. caroline hyde is reporting live. >> good morning. and joined by cofounder chief executive of birchbox. this is an e-commerce copy. they send millions and millions of rock ash boxes. -- millions and millions of boxes. give us an idea of the growth you are having. >> the growth has been really explosive. we started three and half years ago. --had 600 describer's subscribers in one country. now we have well over 400,000 subscribers.

we ship millions of boxes. we are also very proud to say that half of birchbox subscribers are also e-commerce subscribers. to try something, fall in love, and by it. we are a growing company in beauty. >> you purchased a company in france that was doing a similar thing a year and a half ago. sent -- sense of entrepreneurism is in france? >> it is incredible. what of the reasons we came here is because france is a beauty capital. their are a lot of indigenous to france beauty companies. we were very excited that we could be a part of france and we found a team that was so entrepreneurial, so passionate about the actual business model of helping women discover the best beauty products. we thought we could get so much faster. they had done a rollup so they were in france, u.k., and spain. overnight, we were in for countries.

>> give us an example of how it is different in the different company that countries. -- different countries. thatthink most importantly finding the right people. for us in the u.s., we know exactly where we need to look for the engineering and marketing staff. and u.k. and france and spain, we are learning. where these pools of people exist? companies, all these have been here for us hoping lead the charge and show that this room in tech and e-commerce is a global boom. we are a part of that. >> this funding startling -- suddenly escalating tackle you see money wanting to be hurled in your direction? >> we are lucky that we had incredible momentum. we have not fund raise in over two years. we are really excited. we have been able to grow so

weekly and it is than self- funded growth. we want the capital. we feel great about that. i'm sure you have seen that the capital is there he even more eagerly for e-commerce a few years ago. you have strong fundamentals, we keep seeing it is definitely possible to still fund raise. >> what about the product you are offering? that you say you are looking towards asia. how international is the brand? haveery single market, we a customer team, editorial team. part of an important the brand. we went birchbox to stand for discovery. the best way to find new booty products. -- beauty products. most of them will be local. i was mentioned before that in some cases, france in particular, the skin corp., -- the skincare, they want local skincare but the makeup is more open-minded and they love that new productsng

from spain. the u.s. customers that we started with are so excited that we are importing spanish haircare brands and french skincare brands. there were all these brands that they cannot get access to and other we're -- and now we are bringing them to huge cities and small areas. >> thank you very much katia cofounder and ceo of birchbox. back to you in london. --tara one hide their caroline hyde in their. >> are these new distribution proud form -- what forms friend or foe. with --eck in

>> there is a mouthful. >> left look at 22014. -- let us look ahead at 2014. >> what we have seen over the last few years in the media space is that the content owners, news corp.'s and viacom's of the year, the content is more valuable today has ever been. it is not just movie studios. it is the netflix's of the world. if you are a hollywood studio, you have a new major buyer of your content. that is the netflix of the world, the hulu's of the world, the amazon prime's of the world. is another way to get paid. >> of all the platforms paying for the content, does that make up for the fact that viewing by platform is getting increasingly fragmented? there are fewer watching -- people watching each platform. >> the fragmentation of audiences has been a big deal

for the media sector overall. four channels, now we have over 500 channels and the internet-enabled delivery. a thick with these big media companies are trying to do is that they create a model where they get a subscription. netflix or cable or satellite bill as well as advertising. the companies that have been able to create build a revenue screens and subscriptions, those are the ones doing well. >> netflix is creating content. they created "house of cards congo which won an emmy. "house of cards," which won an emmy. >> hbo wrote the book on original content with "sex and the city" and "the sopranos." and theare seeing cnn netflix's of the world creating their own content.

viewers are demanding high- quality, original content. it is raising the bar and the investment that media companies have to make an investment. >> in studios and film, the big theme for next year could be fewer eight-budget releases the big studios. could that pay off? >> some of these studios are getting conservative. when i say that, i mean they are making fewer films but are trying to focus on the franchises, the proven winners. lot moreing to see a franchise movies, a lot more sequels. what they are trying to do when they sit back and hollywood and green made a movie, they're trying to make the decision, will this movie play globally? not just in north america, but in asia and china. you will see a lot more "spider- and "iron man"s. a lot of people are lamenting the fact it is hard to get a new

movie made. let's take a look at ben stiller's new movie, "walter mitty.""walter let's see how that plays. >> is the new "hobbit" filmgoing to break $1 billion? >> expectations are very high. we have seen that franchise do so well over such a long. of time. >> paul sweeney. >> 6:40 a.m. london. a small croatian town is cashing for hbo'sg a backdrop smash hit "game of thrones." fans are traveling there and boosting the local economy. is a city nestled against the adriatic sea. it has been a hit with tv crews and tourist. the medieval time -- medieval

town features and the last season of "game of thrones congo thrones,"f and now they are trying to cash in. $75, she runs a tour and draws crowds from across the globe. a lot of people from australia and america, especially younger people who know about the show new the city through that. that sort of introduces them and they want to come here to see where it was filmed. is in thetory middle ages when it was an important trading hub. and damaged by yugoslav troops during the war of independence. now it was to restore its place

on the global tourist map. they are hoping that the show will help spread the word. >> sticking with the film references, t rivet -- tv references, if you thought the invisibility cloak was finished with "harry potter" think again. ♪

>> carol massar will be at world porch, the $1 billion hub in louisville kentucky. one million ash more than 4 million packages a day are sorted in the holiday season. we'll have a live interview with the ceo, scott davis. >> good morning. what have you got for us? >> it is my first time. i'm excited to join. i am talking about things disappearing. now you see it, now you don't. in perhaps just a couple of will, scientists in china he able to essentially make things disappear. that is what the article is talking about. the race to make world pot first invisibility close -- cloak. to make thingsg disappear. it is what you would see in movies like "harry potter."

it has military implications and that is what the article talks about. 40 teams in china have received funding. it is the only research team that is received this type of funding. the military implications, the security implications are huge. we also understand that it is not usable as of right now. problem -- its probability, is probably a decade or so away. >> thank you. the front page is dominated by nelson mandela again. frontre is quite a nice cover here. a person wearing mandela regalia, so to speak. world leaders have basically we drop what they are doing. everyone is going to south current heads and of state. that will kick off in about four hours time. the wall street journal, you see a lot of analysis were he has been taken off of the current

president. if you days prior to mandela's mandela'sh death -- death, upgrades were being done to his private home with public money. many people are putting the differences is on the table between him and mandela. >> the first thing i look at when i go to the newspaper is the sports section. when i notice you're in the back of the times is english premier soccer league. what we're seeing across the globe -- global is that english soccer is getting big in the u.s.. we know the nfl is exporting nfl football to the u.k. and europe. we see the globalization of sports rights and they are going to the roof. the leagues and players are making a lot of money. it seems that consumers are willing to pay. >> you wonder if there is a bubble and sports. i am in a dark place, but it seems that englanders are in a dark place, as well, because

they keep losing to australia. enough of me and england. ♪

>> the following is a paid program. >> it is about time. >> the number one reason people have for not working out is they don't have time. >> i have four kids. i work 60 or 70 hours a week. >> i do not have the time. >> no time to work out? no problem. focus t25, the home fitness introducing program guaranteed